: States demand extension of GST compensation for next 5 years #finance #StockMarketNEWS #Business Also demand GST rate hike on textiles be put on hold New Delhi: Many states have demanded that the

Posted in: #finance #StockMarketNEWS #Business

States demand extension of GST compensation for next 5 years #finance #StockMarketNEWS #Business
Also demand GST rate hike on textiles be put on hold

New Delhi: Many states have demanded that the GST compensation cess regime be extended for another five years and the share of the Union government in the centrally-sponsored schemes be raised as the COVID-19 pandemic has impacted their revenues.

The GST compensation to states for revenue shortfall resulting from subsuming of local taxes such as VAT in the uniform national tax Goods and Services Tax (GST) will end in June next year.

There has been a loss of revenue to the states due to the GST tax system, the Centre has not made arrangements to compensate the loss of revenue of about Rs 5,000 crore to the state in the coming year, so the GST compensation grant should be continued for the next five years after June 2022, Chhattisgarh Chief Minister Bhupesh Baghel said.

“Many states have asked for this. We have also asked to extend GST compensation. If it is not extended, the finances of many states will be in a bad shape,�? Delhi Deputy Chief Minister Manish Sisodia said after pre-Budget consultation of finance ministers of states with Union Finance Minister Nirmala Sitharaman here.

Pointing out that Chhattisgarh has received less share of central taxes by Rs 13,089 crore in the Union Budget of the last three years, Baghel demanded the share of central taxes should be given to the state completely in the coming year.

He also demanded that Rs 4,140 crore deposited with the Centre at the rate of Rs 294 per tonne on coal mining from coal block companies should be transferred to Chhattisgarh soon. Rajasthan Education Minister Subhash Garg said extension of compensation cess window till 2026-27 is a valid demand of states and the Centre should consider it.

He also demanded reduction in import duty on gold and silver from 10 per cent to 4 per cent.

“Our most significant demand is that the Centre’s share in centrally-sponsored scheme has gradually reduced and states share has increased. Earlier share would be 90-10 and now it is 50-50 or 60-40, our request is that it should go back to 90-10,�? Garg said.

Rajasthan also requested that all irrigation and water work projects should be brought under the Centre’s ambit and schemes.

West Bengal also pitched for extension of GST compensation for another five years citing two years of difficult time due to COVID-19.

Meanwhile, ahead of the GST Council meeting, several states on Thursday flagged higher tax rate on textile products from January 1 and demanded that the rate hike be put on hold.

In the pre-budget meeting chaired by Union Finance Minister Nirmala Sitharaman, states like Gujarat, West Bengal, Delhi, Rajasthan and Tamil Nadu said that they are not in favour of a hike in Goods and Services Tax (GST) rate on textiles to 12 per cent, from 5 per cent currently, with effect from January 1, 2022.